Imperial College London, devoted entirely to science, technology, and medicine, is currently ranked the sixth best university in the world by the UK’s Times Higher Education. It has long had strong research in optics and optoelectronics; the inventor of holography, Dennis Gabor, spent much of his career there, as has John Pendry, who came up with the theory behind negative-refractive-index materials.

Faculty and staff who are commercially minded have even more reason to value the place. The college is home to the Imperial Innovations Group, a firm that, in just a few years, has become the UK’s only university-based technology-transfer company with the resources to invest in its own portfolio. Its companies work in biomedical, engineering, energy, the environment, software, and/or information technology.

Through three fund-raisings, Imperial Innovations has raised £66m to invest in its technology portfolio. “These funds have enabled us to give our companies a financial boost whilst attracting funding from established venture capitalists and private equity companies and lead investments,” says Susan Searle, CEO.

Chairman Martin Knight says that Imperial Innovations (aka Innovations) is still in the investment phase of its development. Operating income, he says, including licensing, royalty, and fee income, does not match its administrative costs, nor will it for the foreseeable future. However, he explains that this is because Innovations’ portfolio “is still dominated by early-stage investments, when disappointments are at their most numerous.”

Major gains, he says, will only come when this phase has passed and its investments realize their net asset increase, as happened when Imperial Innovations sold its share of Ceres Power, a fuel-cell company, last year.

Nevertheless, Innovations is clearly a success so far. It has almost 200 licenses and intellectual property agreements, with fees totalling £2.5m.

It has 47 actively-managed companies in its portfolio—of which 18 are currently in incubation. It has less equity and oversight over an additional 42. It also recently founded I2india, a company to replicate the Innovations model in India, and £1.5m in capital has already been raised for it.

Tech Transfer Formula

According to Searle, what makes Innovations’ companies succeed is not just investment, but making sure the investment is used wisely. Investment funds come with ongoing advice, expertise, and access to networks of investors, entrepreneurs, and industrialists.

“We continue to support the companies through subsequent funding rounds working in partnership with founders, management, and co-investors to accelerate their development,” she says. “Since we started investing, the progress and the turnaround in our companies have been dramatic. With these funds, the companies are able to get the technologies off the ground much faster and allow their products to be sold much more quickly.”

To this end, Innovations has developed a process that involves several important steps, the first and most obvious of which involves reaching out to researchers at Imperial College to find the most commercially viable new research. Being onsite helps, of course, but the company also publishes articles on its activities in a dedicated Inventor’s Corner section of the college staff newspaper and works hard to create and exploit networking opportunities.

Once promising ideas have been identified, the next stage is not only to carefully and systematically nail down the intellectual property (IP) for the Imperial invention, but to find complementary research—from whatever source—that will be necessary to produce a truly viable technology. Innovations then works with inventors to patent these ideas too, so creating a valuable, consolidated IP package.

Administrative Help

An important part of this process involves dealing with the reality that academics are generally overstretched, so, as far as possible, Innovations staff removes any administrative burden associated with the protection of IP.

Andrew Barber, deputy head of Engineering Technology Transfer at Imperial Innovations, points out that nailing down the IP involves more than just filing patents.

“In a number of cases, early stage technologies need development to prove the concept or to develop prototype devices,” Barber says. “This can sometimes be a lengthy process for which normal grant funding may not apply. Imperial Innovations is able to advise on sources of early-stage funding and, in particular, has resources of its own to invest in projects that show a clear route to market.”

Another crucial early step is to consider the reality of a new technology and its applications in the light of what industry and the marketplace generally really want and need, rather than what sounds like a cool idea.

Innovations has two investment advisory boards with members chosen for their industrial experience: one for engineering-related technology, and one for healthcare. Board members use their networks to find the right people to shed light on the use of potential new products and to consider both internal and external market analyses. This step is ongoing and feeds into many others, including IP. As the application changes, so—potentially—does the IP required to make it work.

Once the IP and market have been thought through, the next stage is to help start up a company. This is straightforward, but leads to the step that is the single thing that inventors mention most when praising Innovations: Helping to identify and recruit the right people to run the new ventures.

According to Michael Damzen, the professor of Experimental Laser Physics at Imperial who gives his name to Midaz lasers, “They played a vital role in the formation of the company, helping with the logistic and legal side but most importantly they introduced key individuals who now form Midaz’s strong management team.”

Keith Barnham is an emeritus professor in the Department of Physics and co-founder and CTO of QuantaSol, a company that boasts the most energy-efficient solar-cell to date. He says that Innovations’ most valuable contribution to his company was “finding QuantaSol an excellent CEO.”

Eric Yeatman, a professor in the Electrical and Electronic Engineering Department and co-founder of Microsaic Systems, echoes this sentiment. “Our Innovations-appointed director, Peter Selway, has been with us from the beginning and has been a great asset to the board and the company. Innovations also put us in touch with various professional advisers, and our long-standing lawyer came through this route.”

Yeatman also cites incubation as another important step in the Innovations process. Imperial’s onsite incubator provides office and laboratory space for early stage companies: It has 12 laboratories and 22 offices totalling 2400 square feet. According to Yeatman, “The facility has been very valuable to us, as have opportunities to meet other early stage technology companies to share ideas and experiences.”

Financial Support

And finally, of course, investment is critical.

Keven Arthur, the CEO of QuantaSol, says “Imperial Innovations has been supportive in many ways and plays an active role on our board of directors. But, if I had to pick one thing, it would be their financial support from their own investment fund and excellent connections to other investors.”

Arthur says Imperial Innovations provided pre-seed investment, “along with an angel investor that they introduced to us, then significant seed investment and follow-on …. This ability to quickly provide finance right from the very early days is crucial to technology startups like QuantaSol, and the credibility that Innovations delivers is immensely helpful when you are trying to attract other investors.”

Imperial Innovations

Imperial Innovations was established as a separate business in 1997 and completed its transition from Imperial College’s Technology Transfer Department in 2008.

The company combines the functions of technology transfer, company incubation, and investment in one organisation to accelerate commercialization of photonics and other technologies.

Midaz Laser

Midaz (founded in 2006 with assistance from Imperial Innovations) claims to be the world’s only supplier of diode-pumped solid state (DPSS) lasers with megahertz pulse rates. Based on the bounce amplifier geometry concept developed at Imperial College London’s photonics group, the high-power (up to 25W) lasers are being pitched for applications in micromachining, particularly to improve quality and throughput.

The DPSS lasers have the advantage, unlike conventional DPSS lasers, of good thermal control. Also, the Midaz devices can provide a peak power up to two orders of magnitude higher than fiber-based competitors. Applications include silicon wafer processing and solar cells.

Microsaic Ionchip

Microsaic Systems (founded in 2001 with help from Imperial Innovations) has developed a micromachined mass-spectrometer device called an Ionchip that can currently be bought as part of two systems, both of which are tiny compared to conventional mass spectrometers. One is essentially a computer peripheral. The Ionchips are plug-and-play modules that can be replaced immediately on failure.

The systems can be used as chemical sensors for security applications, in drug research, and for process analysis.